Hedge Funds Win Through Stock Connect

HONG KONG—A clutch of Asian hedge funds that seized on a new trading link between Hong Kong and Shanghai are posting outsize returns at a time when other investors remain wary of placing big bets on Chinese companies.

The Shanghai-Hong Kong Stock Connect link, which opened in November, offered foreign investors their first chance to directly buy stocks in China’s biggest stock market, rather than using quotas allocated to investment banks and other market players.